Jakarta floats 'refugee island' idea

An Indonesian government spokesman has confirmed preliminary talks have been held on plans to house asylum seekers on an island funded by the Australian government.

Thousands of asylum seekers and refugees are awaiting resettlement in Indonesia, deterred from making the remainder of the journey to Australia by Canberra's boat turnback policy.

Co-ordinating Minister for Political, Legal and Security Affairs Luhut Panjaitan, who visited Sydney this week, told The Jakarta Post and Straits Times newspapers he had early talks with Australia on an island shelter.

Ministry spokesman Agus Barnas confirmed to AAP the plan was "still under discussion" and was first floated under previous president Susilo Bambang Yudhoyono.

"In the talks, there was such an idea," he said.

"It was one of the discussion topics among others like intelligence co-operation, combating terrorism, trade, things like that."

Mr Agus said among many conditions that needed to be resolved were funding and the period refugees would wait for resettlement.

The Asia Pacific Refugee Rights Network likened the plan to other controversial refugee deals with Cambodia and Malaysia.

The group's Julia Mayerhofer says Indonesia has not signed the UN refugee convention, so asylum seekers already struggle to access basic services, are subject to immigration detention, and do not have the right to work.

"Instead of bilateral discussions, the Australian and Indonesian governments should rather focus their efforts on advancing regional co-operation and responsibility sharing," she told AAP.

"This includes improving the conditions in host countries such as Indonesia and exploring local integration, instead of sending them to an isolated island."

Mr Panjaitan was in Malaysia on Friday and could not be contacted.

He told The Jakarta Post the island should not become another Galang Island, a troubled place that housed Vietnamese refugees between 1979 and 1996, many of whom were later resettled in Australia.

The minister said worries about community conflict and terrorism were behind the plan to isolate the asylum seekers, and it should also put an end to boat turnbacks.

"I told them such actions are wrong and against humanitarian principles," he told the newspaper.

"They are still unsure of how to respond, but they are hoping relations between the two countries will be at an all-time high."